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Jul 03 2013

Australian Tax on a Working Holiday Visa WHV

Australian Tax OfficeThe Australian Financial year has now ended, and many are looking at doing their Tax Returns, and claiming back whatever tax they have overpaid during the year.

Those visitors on a Working Holiday Visa are no exception, especially as they have heard that they can claim back all the tax they have paid. This is NOT actually correct all the time. Some may have MORE tax to pay, if insufficient tax was collected by the employer, but most will have paid the correct tax, and have no rebate, and no liability.

Did you tell the employer that you were NOT tax resident ?
Did the employer deduct the correct tax even if you did ?
Were you Tax Resident or Non Tax Resident ?

Without going into the complexity of Tax Residency at this stage, lets just look at some simple figures…

Assume you worked for 16 weeks during the year ended June 2013, and earned an average of $1,000 each week.

You would have paid $178 per in Tax and Medicare if deductions were based on residents rates. This totaled $2,848 for the entire working period.

You would have paid $325 per in Tax only if deductions were based on non-residents rates. This totaled $5,200 for the entire working period.

As a NON resident, your annual tax return would calculate that you should have paid $5,200 in tax.

IF your tax was deducted correctly, then you have paid the right amount.

IF your tax was collected by the employer at residents rates, then you have not paid enough, and you OWE the tax office $2,352.

IF you paid tax at NON resident rates, but then qualified for residents rates by June 30th, the Tax Office owes you $5,200,. This is because an annual income of $16,000 (for tax residents) is under the tax threshold, and NO tax is due.

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